The cost of parking at city centre pay-and-display bays will be almost 10% cheaper after Friday 30 November.
The reductions, which follow a public consultation exercise in September, bring the cost of parking at city centre pay-and-display bays level with 2008 rates.
As part of the changes, the maximum time vehicles can park in the city centre will be increased from two to four hours.
The cost of parking all day at the Mount Pleasant and London Road car parks will also be reduced from £7 to £4.
Cllr Joe Anderson, mayor of Liverpool, said: "These changes will bring huge benefits to motorists, easing the burden on people's pockets in tough economic times, as well as giving a boost to businesses by attracting more shoppers and visitors into the city centre.
"This is an important time of year for our retailers and it's vital we do as much as we can to support them. By making parking more convenient and affordable, not just this Christmas, but throughout the year, we can make sure our city centre continues to thrive."
The changes form part of a major, city-wide review into parking policy, with further proposed changes to be announced in the near future.
Cllr Tim Moore, Liverpool City Council's cabinet member for transport, said: "The cuts to parking charges – the first we've made in a number of years – will be really welcomed by motorists, giving them more freedom and time to shop, eat, do business and visit attractions.
"It's an important part of our wider review of all aspects of parking in this city."
Ged Gibbons, chief executive of City Central and Commercial District BIDs, which represent more than 1,400 businesses in the city centre, said: "Car parking charges are a critical factor for our retail sector and the fact these cuts will encourage people to stay longer will hopefully have a positive knock on effect at the tills.''
The new parking tariffs at city centre pay-and-display bays are:
Up to 30 minutes – £1 (reduced from £1.10)
Up to 1 hour – £2 (reduced from £2.20)
Up to 1 hour 30 minutes – £3 (reduced from £3.30)
Up to 2 hours – £4 (Reduced from £4.40)
Up to 4 hours (max stay) – £5.00
The changes will only affect pay-and-display-bays which fall within the 'Inner Controlled Parking Zone'.